Section 16(5) Directly Applied: Gauhati HC Quashes OIO Denying ITC on Belated Return Without Any Remand

The Gauhati High Court has directly applied Section 16(5) of the CGST Act to quash an assessment order that had denied ITC on the ground of belated filing of returns for FY 2018-19 — without remanding the matter for fresh adjudication by the Revenue. The ruling, by Justice Devashis Baruah in WP(C)/2722/2024 (Rajib Agarwala, decided 07.08.2026), illustrates what direct judicial application of the retrospective provision looks like when the facts are straightforward and uncontroverted.

The petitioner is a registered GST dealer whose GSTR-3B for FY 2018-19 was filed on 23.10.2019 — beyond the Section 16(4) deadline as it then stood. An OIO dated 13.03.2024 denied the ITC of Rs. 84,58,480 claimed in that return on the strength of Section 16(4)'s time bar. The petitioner challenged both the OIO and the extension notification (Notification No. 9/2023-CT) used to regularise the assessment.

Before the court, the petitioner's counsel drew attention to Section 16(5), inserted by the Finance Act 2024 with retrospective effect from 01.07.2017. Section 16(5) provides that notwithstanding Section 16(4), registered persons are entitled to take ITC for FY 2017-18, 2018-19, 2019-20 and 2020-21 in any return filed under Section 39 up to 30.11.2021. The GSTR-3B for FY 2018-19 was filed on 23.10.2019 — well within 30.11.2021. The court found the application of Section 16(5) straightforward: the return was filed within the extended cut-off; the ITC cannot be denied on the Section 16(4) ground.

The OIO was set aside outright, without remand. The court's willingness to decide the matter definitively — rather than setting aside and asking the adjudicating authority to reconsider in light of Section 16(5) — is significant. It reflects the position, increasingly taken by courts, that where Section 16(5) clearly covers the facts and the return was filed before 30.11.2021, there is no factual question remaining for fresh adjudication; the ITC entitlement is established by operation of law.

2026-juristway.com-2320-HC(Gauhati)-GST  |  Gauhati High Court | WP(C)/2722/2024  |  07.08.2026